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The Back to Back Bank Guarantee is a crucial financial instrument in Pakistani banking practice, typically used in large commercial transactions, infrastructure projects, and international trade. It provides a mechanism where a bank issues a guarantee to a beneficiary, backed by a counter-guarantee from another bank, often used when the applicant's primary banking relationship is with a bank different from the one required to issue the guarantee. The document must comply with the Banking Companies Ordinance 1962, State Bank of Pakistan regulations, and other relevant Pakistani banking laws. It includes detailed provisions for guarantee activation, payment procedures, documentation requirements, and risk allocation between the banks involved. This arrangement is particularly valuable in cross-border transactions where local bank guarantees are required but the applicant's relationship bank is located in another jurisdiction.

1. Parties: Identification of all parties: Primary Bank (Guarantor), Counter-Guaranteeing Bank, Applicant, and Beneficiary

2. Background: Context of the transaction, relationship between parties, and purpose of the guarantee

3. Definitions: Definitions of key terms used throughout the guarantee document

4. Guarantee Amount and Scope: Specification of the guarantee amount, currency, and precise scope of both guarantees

5. Terms and Conditions: Core conditions governing the guarantee, including trigger events and payment obligations

6. Duration and Validity: Period of validity, expiry conditions, and any extension provisions

7. Demand Procedure: Process and requirements for making a valid demand under the guarantee

8. Payment Terms: Terms and timing of payments, currency considerations, and payment mechanics

9. Counter-Indemnity: Counter-guaranteeing bank's obligations to indemnify the primary bank

10. Representations and Warranties: Standard declarations by all parties regarding capacity and authority

11. Bank's Rights and Obligations: Detailed rights and obligations of both banks under the arrangement

12. Governing Law and Jurisdiction: Specification of Pakistani law as governing law and jurisdiction details

13. Notices: Communication procedures and contact details for all parties

14. Termination: Circumstances and procedures for termination of the guarantee